Start again at Belene

01 October 2009

Bulgarian politicians are working to pull the Belene project 'out of the swamp' with a new financial framework while the search is on for missing money.

How Belene might one day look

The country could reduce its stake in the two-reactor project to as little as 20%, according to minister for economy, energy and tourism Traiko Traykov. The previous figure was 51%, to be held by the National Electricity Company (NEK) with the remainder held by utility RWE of Germany.

NEK remains the favoured state vehicle for investment in Belene but the company has suffered bad financial results and is currently undergoing an audit. It is hoped that the probe will solve the riddle of what exactly has happened to some €400 million ($580 million) earmarked for Belene.

Deputy prime minister and finance minister Simeon Diankov said the money was approved by the previous government to set up a joint venture company held by NEK and the Russian interests actually building the reactor. However, no such joint venture exists and currently available information does not reveal the location of the money, although it is thought to be somewhere in the accounts of NEK or Bulgarian Energy Holdings.

Diankov said he was puzzled by the actions of 'fairly smart people' when 'it is impossible for them to not realise what they are doing'.

'Probably... [they] have been assured that the system will never change and no one is looking over them, that nobody will ever check them and they will always be covered. They had confidence in the tradition that each successive government conceals the past and are now shocked by what is happening.'

The government now is engaged in talks with Russian ministers and executives that are keen to execute the plans and take a large stake in the project as well as RWE, which is said to be upset by the waste of money so far. Prime minister Boyko Borisov said that 'very heavy conversation' was ongoing with RWE about how to 'get out of the swamp'.

Political will remains in Bulgaria to see a successful restart of this project but only at limited financial risk to taxpayers, said Traykov. He would not link the potential reduction in the country's stake in the project to any view of its financial viability, but said that the government was working with RWE to establish an acceptable 'clear financial framework' to get the project moving again.